I would like to take this opportunity to introduce you to my first experiences in the world of trading. My name is Martin, I am 25 years old, a trained wholesale and foreign trade merchant and currently a business administration student at the University of Hamburg. For quite some time I had been working on the possibility of earning some money on the Internet here and there. During my research I came across more or less serious offers such as “earning 5,000 extra euros a month in homework without any problems” or “making money from my home PC with online poker” – but both variants were of course not what I had hoped for from my idea of earning money seriously on the net and so I soon almost gave up my search. On a lecture-free afternoon, while browsing the net, I came across a promising advertisement, that of a so-called online broker. Although I had already dealt here and there with the subject of the stock exchange, I did not yet know that this was also possible from a private point of view from my home PC or laptop. Jener Broker was Plus500 – I informed myself about this broker in the net very well and could read actually by the bank away positive feedbacks about this broker – particularly since this broker offered a useful demo account to its new customers, on which the newcomer could trade first of all with play money. How the registration and the first deposits with real money went, I would like to explain this to you with the following section.

Registration with online broker Plus500 and first deposits – my first trades with real money

The registration was relatively easy and took less than two minutes – at no time did I feel overwhelmed as a newcomer. After a few hours of initial trading experience with commodities, currency pairs and CFDs on the demo account, I was ready for my first real money deposit and later trading on the live account. I decided to load 100 Euro on the account of Plus500 to try my luck in the stock market world from my laptop at home – just because as a student you should keep your Euros together. As a small special feature of the Broker Plus500: when I made my first deposit of 100 Euro, the broker awarded me a bonus of 30 Euro. A nice gesture as I found, I was able to test myself with a total of 130 Euro. And so I used this advantageous circumstance and immediately sat down in front of my laptop at home and usually started trading around 8 o’clock in the morning – mostly on lecture-free days. I logged into my trading account, put on a pot of coffee, spread my fingers and started trading. While I usually spent the first half hour of the day rehearsing the current price trends. Furthermore, I usually took the time in the morning to get to know current, economic-political or worldly events in order to be able to anticipate corresponding price developments. After this first, half hour in the morning, I started to do something fresh. My first trades were mainly in the Forex area, i.e. in trading foreign exchange. And so I focused on the EUR/USD and EUR/GBP currency pairs – trading between the euro and the foreign currencies US dollar and British pound. Here I sometimes bet on “long” – i.e. on rising prices – and also on “short” – i.e. on falling prices. In the form of the so-called “scalping”, i.e. the only very entertaining holding of positions, I was initially able to earn between 3 and 10 euros per position on average with still very small levers, but now and then I also lost money by taking other price movements than I predicted. From experience I can say that the first trades looked like this: trades with a profit of about 5 Euro came to a large loss trade of about 20 Euro loss. On average, I slowly lost capital on the first trades. In the following section, however, I will explain how I was able to significantly improve this strategy.

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Larger profits can only be realized with more experience and a suitable trading strategy

The trades only became much more emotional in the course of the months and so, after the first leveling of my trading account with a new deposit of 500 euros, I also increased the later bets on trading. In addition, there were various trades in CFDs and commodities, with which I tried my luck in trading. And that sometimes went really well. I still remember my first really successful trades. Here I made my first – for me really big – profits with commodities. They bet on crude oil – initially with micro lot (i.e. 1000 base units of the foreign currency) and later also with larger lots. So I partly bet 300 Euro of my own capital and partly borrowed several thousand Euro from the broker to trade with it. That went really well! So I was able to earn 1251,56 Euro with my best position. For this purpose, I increased the value of the position further and further the more it slipped into positive territory. Of course, I followed the so-called stop loss, which is intended to protect the position from sudden price drops. In this trade I was more than adrenaline-charged, it was about as much money as I had as a student at that time for two months to live. But after big profits followed partly also big losses – EUR/JPY with minus 386.12 euro loss, DAX30 CFD with minus 566.98 euro loss and each quantity smaller losses in the range between 50 and 100 euro, which summed up however. The bottom line was that in the first few months I had an average of 10 large loss trades, several smaller losses, numerous break-even trades and an average of 5 really large gains of over 1000 euros, which made the monthly result. And so I still trade now besides my studies, currently with about (after deductions of capital gains tax at the tax office) 500 euros profit a month. A lucrative thing, as I think, even if it takes a lot of time and the emotions especially after bigger losses are not to be underestimated. However, I plan to continue to improve in order to be able to live from it sometime completely.

What strategies I use and through what media I have always traded

Since I’m not a professional yet, I keep things as simple as possible, although I use the sparse chart analysis features that the broker Plus500 offers its users here and there, but I usually follow the strategy “the trend is your friend”. And so I usually take a look at the price trends of the past months/years and try, in connection with current world events, to draw a conclusion as to whether I should go long or short and, above all, how much I should set in the current price trend. Surely it is not advisable to bet house and farm on relatively volatile currencies like the Japanese yen and so I often limit high-risk trades to a minimum, whereas the trades where the price is relatively quiet are more betting. Trades have always been done from my home laptop with DSL connection. I’m not necessarily the friend of doing any money transactions in public via smartphone, although this possibility exists in principle. Rather, when trading I need my peace and quiet and the opportunity to be able to do any research into current world events in peace. Besides, trading is a very emotional thing and I can’t imagine with the best will in the world that something like this on the daily way to university in the S-Bahn is a lot of fun, especially if you really lose money and everyone looks at you stupidly because your face is falling asleep in shock at your own loss of capital.

 

Experience report written by Martin Sch. 25 years, from Hamburg